MANILA – (UPDATE2 - 7:36 p.m.) The Hong Kong government has imposed long-threatened sanctions on the Philippines over its alleged failure to resolve to Hong Kong’s satisfaction the August 2010 bus hostage crisis that ended with the death of eight HK tourists at Rizal Park in Manila, a HK-headquartered daily reported, quoting government announcements.

The South China Morning Post said in a report that “Hong Kong will cancel visa-free arrangements for Philippine officials and diplomatic passport holders in the first phase of sanctions against the country in light of the Manila bus hostage crisis.”.

HK Chief Executive Leung Chun-Ying was also quoted saying the HK government received an unspecified “negative message” from the Philippine government on Monday, and that “the discussion between the two governments on Tuesday bore no fruit.”

The current visa-free arrangement for visiting Filipino diplomats and officials will be suspended from February 5, Leung Chun-ying told a press conference.

Currently they are able to stay 14 days without a visa.

Leung described the move as the "first phase of sanctions" and said the government may take more action if it thinks it could be "effective" in securing an apology over the 2010 hostage taking.

Hong Kong has been demanding an apology for the incident in which, aside from the eight Hong Kongers killed, seven others were wounded.

He said Manila had failed to respond to demands for a formal apology from the victims and their families.

The economic sanction, according to the SCMP report, will be in effect Feb. 5. That means Philippine official and diplomatic passport holders visiting Hong Kong will no longer enjoy the 14-day visa free status.

The sanctions come just two months after President Benigno Aquino III’s special emissary to HK reported slow but steady progress in persuading the HK government and the victims’ families to accept Manila’s offer of medical assistance for survivors. The Philippines gave an undisclosed amount to one survivor, Yik Siu-ling, whose surgery in Taiwan last month cost about HK$1 million.

The bus hostage saga began early morning of August 23, 2010, when dismissed Manila police colonel Rolando Mendoza took hostage 22 Hong Kong tourists and three Filipinos on their coach in Manila. A 12-hour negotiation followed with the bus parked at Quirino Grandstand, where Philippine presidents used to take their oath of office.

HK officials were incensed before that no action had been taken against Philippine officials deemed to have failed in their tasks, including the then-Manila Mayor Alfredo Lim, a friend of the President’s family and his partymate.

At Wednesday's briefing, Leung said, "The Philippine side is still unable to meet the demand of the victims and the families for a formal apology despite many rounds of discussions," Leung said. "The response is unacceptable."

Hong Kong lawmaker James To, who also represents families of the victims, said it was the first time the city had imposed sanctions on a foreign country.

"It sent a very clear message that the government is very determined to fight for justice for Hong Kong people," To told reporters.

President Benigno Aquino III has refused to apologise on behalf of his country, insisting the deaths were mainly caused by the actions of the hostage-taker.

The apparent incompetence of the police during the hostage crisis outraged residents of Hong Kong, a city with low crime rates.

Hong Kong has maintained a travel warning to the Philippines since then.

But its threat of sanctions in November, when Super Typhoon Yolanda (Haiyan) devastated large parts of the Philippines, was widely criticized.

The Philippine consulate in Hong Kong was not immediately available for comment.

In November a Hong Kong woman who was shot in the face during the hostage crisis became the first to receive a payout from Manila, an undisclosed sum donated by Filipino businessman.

More than 160,000 Philippine nationals live in Hong Kong, with most working as domestic helpers. Bilateral trade totalled some $8.2 billion in 2012.